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Accounting Policies of Gabriel India Ltd. Company

Mar 31, 2016

a) Basis of Accounting

Tese financial statements have been prepared in accordance with the generally accepted accounting principles in India under the
historical cost convention on accrual basis. Tese financial statements have been prepared to comply in all material aspects with
the accounting standards notified under section 133 of Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the companies operating cycle and other criteria
set out in the revised Schedule III to the Companies Act, 1930. Based on the nature of products and the time between the
acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its
operating cycle as 12 months for the purpose of current – noncurrent classification of assets and liabilities.

b) Use of Estimates

Te preparation of financial statements requires the management to make estimates and assumptions considered in the reported
amount of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported
income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial
statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is
recognized prospectively in current and future periods.

c) Tangible Assets

- Tangible Assets are stated at their original cost (net of CENVAT where applicable) including freight, duties, customs and other
incidental expenses relating to acquisition and installation. Interest and other finance charges paid on loans for the
acquisition of tangible qualifying assets are apportioned to the cost of fixed assets till they are ready for use.

- Expenditure incurred during the period of construction is carried as capital work-in-progress and on completion the costs are
allocated to the respective fixed assets.

- Foreign exchange fluctuations on payment / restatement of long term liabilities related to fixed assets are charged to
Statement of Profit and Loss.

- Assets held for sale or disposal are stated at the lower of their net book value and net realizable value.

d) Intangible Assets

- Intangible assets comprising of computer software and technical know-how fee are initially measured at cost and amortized so as
to reflect the pattern in which the asset''s economic benefits are consumed.

e) Depreciation / Amortization :

- Tangible Assets

Depreciation on tangible assets is provided on straight line method over the useful life of asset prescribed in Part C of
schedule II of the Companies Act, 2013 except in respect of certain assets listed below where useful life is estimated different
from the prescribed rate based on internal assessment or independent technical evaluation carried out by external values. Te
management believes that the useful lives as given below represent the period over which management expects to use these assets.

In terms of the requirements of the Company Act, 2013 the company has also identified significant components of the assets and
its useful life based on the internal technical valuation. Depreciation charged on such component is based on its useful life.


f) Investments

Long term investments are stated at cost. Provision is made for any diminution other than temporary in the value of investments.

Current investments are stated at cost or fair value, whichever is lower.

g) Inventories

Inventories are stated at lower of cost or net realizable value. Cost of raw materials, stores and spares and packing materials
are determined on weighted average basis. Cost of finished goods and work in progress comprises raw material, direct labour,
other direct costs and related production overheads.

h) Government Grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with
the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the Statement of Profit and
Loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant
relates to an asset, they are deducted from gross value of such assets.

Government grants of the nature of promoters'' contribution are credited to capital reserve and treated as a part of the
shareholders'' funds.

i) Revenue Recognition

- Domestic sales are recognized at the point of dispatch/delivery of goods to the customers as per terms of contract, which is,
when substantial risks and rewards of ownership passes to the customers, and are stated net of trade discounts, rebates, sales
tax, value added tax and excise duty.

- Export sales are recognized based on the date of bill of lading except, sales to Nepal which are recognized when the goods
cross the Indian territory, which is when substantial risks and rewards of ownership passes to the customers.

- Revenue from services is recognized on rendering of services.

- Interest and other income are recognized on accrual basis.

- Income from export incentives such as premium on sale of import licenses, duty drawback etc. are recognized on accrual basis to
the extent the ultimate realization is reasonably certain.

- Dividend income is recognized when right to receive dividend is established.

j) Accounting for taxes on income

- Provision for current tax is made, based on the tax payable under the Income Tax Act, 1961. Minimum Alternative Tax (MAT)
credit, which is equal to the excess of MAT (calculated in accordance with provisions of Section 115JB of the Income tax Act,
1961) over normal income-tax is recognized as an asset by crediting the Statement of Profit and Loss only when and to the extent
there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period
of ten succeeding assessment years.

- Deferred tax on timing differences between taxable income and accounting income is accounted for, using the tax rates and the
tax laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets on unabsorbed tax losses and
unabsorbed tax depreciation are recognized only when there is a virtual certainty of their realization. Other deferred tax
assets are recognized only when there is a reasonable certainty of their realization.

k) Foreign Currency Transactions

- Initial Recognition : - Transactions in foreign currencies are recognized at the prevailing exchange rates between the
reporting currency and a foreign currency on the transaction dates.

- Conversion : -Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates
and the resultant exchange differences are recognized in the Statement of Profit and loss. Non-monetary items, which are measured
in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the
transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency,
are translated using the exchange rate at the date when such value was determined.

- Exchange differences:- Te Company accounts for exchange differences arising on translation/settlement of foreign currency
monetary items as below:

- Realized gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.

- Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates and the
resultant exchange differences are recognized in the Statement of Profit and Loss.

- Forward exchange and other derivative contracts entered into to hedge foreign currency risk of an existing assets/ liabilities

- In case of forward contracts with underlying assets or liabilities, the difference between the forward rate and the exchange
rate on the date of inception of a forward contract is recognized as income or expense and is amortized over the life of the
contract.

- Exchange differences on such contracts are recognized in the Statement of Profit and Loss in the period in which the exchange
rate changes.

- Any Profit or loss arising on cancellation or renewal of forward exchange contracts are recognized as income or expense for the
period.

- Forward contracts entered into by the company to cover its exposure against firm commitment are marked to market as at the year
end. Te resultant loss is recognized in the Statement of Profit and Loss and gain, if any is ignored.

- Premium or discount on foreign currency forward and option contracts are amortized and recognized in the statement of Profit
and loss over the period of contract.

l) Research and Development

Equipment purchased and cost of construction of assets used for research and development is capitalized when commissioned and
included in the fixed assets. Revenue expenditure on research and development is charged in the period in which it is incurred.

m) Retirement Benefits

- Provident Fund : - Contribution towards provident fund is made to the regulatory authorities. Such benefits are classified as
defined contribution schemes as the Company does not carry any further obligations, apart from the contribution made on a monthly
basis.

- National Pension Scheme : - Contribution towards pension fund is made to the various funds. Such benefits are classified as
defined contribution schemes as the Company does not carry any further obligations, apart from the contribution made on a yearly
basis.

- Superannuation Fund : - Te Company has Defined Contribution plans for Superannuation Fund. Contributions payable to the
Superannuation Fund maintained by LIC are charged to the Statement of Profit and Loss. Te Company does not carry any further
obligations, apart from the contribution made.


- Gratuity : - Te Company provides for gratuity, a defend Benefit plans (the "Gratuity Plan") covering eligible employees in
accordance with the payment of Gratuity Act, 1972. Te Gratuity plan provides a lump sum payment to vested employees at
retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the
nature of employment. Te Company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of
each year. Actuarial losses / gains are recognized in the statement of Profit and Loss account in the year in which they arise.
Te Gratuity Fund is maintained with LIC which is recognized by the income tax authorities.

- Compensatory Absence : - Te Company provides for the encashment/ a ailment of leave with pay subject to certain rules. Te
employees are entitled to accumulate leave subject to certain limits for future encashment/a ailment. Te liability is provided
based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation.

n) Borrowing Cost

Borrowing Costs attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the
cost of the asset till the asset is ready for use. Interest on other borrowings is charged to Statement of Profit and Loss.

o) Leases

Lease arrangement where the risks and rewards incidental to the ownership of an asset substantially vest with the less or are
recognized as operating leases. Lease rent under operating leases are recognized in the Statement of Profit and Loss as per terms
of agreement.

Assets acquired under finance leases are recognized at the lower of the fair value of the leased assets at inception and the
present value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the
outstanding liability. Te finance charge is allocated to periods during the lease term at a constant periodic rate of interest on
the remaining balance of the liability.

p) Warranty Provision

Te estimated liability for product warranties is recorded at the time of the sale of the products. Te provision is based on
management''s estimate of the future cost of corrective action on product failure considering the claims received in the past.

q) Provisions and Contingencies

Provisions are recognized when there is a present obligation as a result of a past event, and it is probable that an outfow of
resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of
the obligation.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company or a present obligation that arises from past events where it is either not probable that an outfow of resources will be
required to settle the obligation or a reliable estimate of the amount cannot be made.

r) Impairment

Te carrying value of assets/cash generating units at each balance sheet date are reviewed for impairment. If any indication of
impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of
these assets exceeds their recoverable amount. Te recoverable amount is the greater of the net selling price and their value in
use. Value in use is arrived at by discounting the future cash fows expected to arise from the continuing use of an asset and
from its disposal at the end of its useful life to their present value based on an appropriate discount factor.

s) Earnings Per Share

Basic earnings per share is calculated by dividing the net Profit or loss for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company''s
earnings per share is the net Profit for the period After deducting preference dividends and any attributable tax thereto for the
period. Te weighted average number of equity shares outstanding during the period and for all periods

a) Rights, preferences and restrictions attached to Equity shares:

Te Company has only one class of share referred to as Equity shares having a par value of Re.1 per share. Each holder of Equity
shares is entitled to one vote per share. Te Company declares and pays dividends in Indian rupees. Te final dividend proposed by
the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the unlikely event of liquidation of the Company, the holders of Equity shares will be entitled to receive remaining assets of
the Company, After distribution of all preferential amounts. Te distribution will be in proportion to the number of Equity shares
held by the shareholders.

During the year ended 31st March 2016, the amount of per share dividend recognized as distributions to Equity shareholders was
Rs. 1.20 (31st March 2015: Rs. 1.05).

presented is adjusted for events, such as bonus shares, sub-division of shares etc. that have changed the number of equity shares
outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net
Profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during
the period is adjusted for the effects of all dilutive potential equity shares.

t) Cash and Cash Equivalents

In the Cash Flow Statement, cash and cash equivalents includes cash in hand, demand deposits with banks, other short- term highly
liquid investments with original maturities of three months or less.


Mar 31, 2015

A) Basis of Accounting

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under section 133 of Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Companies operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - noncurrent classification of assets and liabilities.

b) Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amount of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) Tangible Assets

- Tangible Assets are stated at their original cost (net of CENVAT where applicable) including freight, duties, customs and other incidental expenses relating to acquisition and installation. Interest and other finance charges paid on loans for the acquisition of tangible qualifying assets are apportioned to the cost of fixed assets till they are ready for use.

- Expenditure incurred during the period of construction is carried as capital work-in-progress and on completion the costs are allocated to the respective fixed assets.

- Foreign exchange fluctuations on payment / restatement of long term liabilities related to fixed assets are charged to Statement of Profit and Loss.

- Assets held for sale or disposal are stated at the lower of their net book value and net realisable value.

d) Intangible Assets

- Intangible assets comprising of computer software and technical know-how fee are initially measured at cost and amortised so as to reflect the pattern in which the asset''s economic benefits are consumed.

e) Depreciation / Amortization :

- Tangible Assets

Depreciation on tangible assets is provided on straight line method over the useful life of asset prescribed in Part C of schedule II of the Companies Act, 2013 except in respect of certain assets listed below where useful life is estimated different from the prescribed rate based on internal assessment or independent technical evaluation carried out by external valuers. The management believes that the useful lives as given below represent the period over which management expects to use these assets.

- Intangible Assets

Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use. Estimated useful lives are as under:-

f) Investments

Long term investments are stated at cost. Provision is made for any diminution other than temporary in the value of investments.

Current investments are stated at cost or fair value, whichever is lower.

g) Inventories

Inventories are stated at lower of cost or net realizable value. Cost of raw materials, stores and spares and packing materials are determined on weighted average basis. Cost of finished goods and work in progress comprises raw material, direct labour, other direct costs and related production overheads.

h) Government Grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, they are deducted from gross value of such assets.

Government grants of the nature of promoters'' contribution are credited to capital reserve and treated as a part of the shareholders'' funds.

i) Revenue Recognition

- Domestic sales are recognised at the point of dispatch/delivery of goods to the customers as per terms of contract, which is, when substantial risks and rewards of ownership passes to the customers, and are stated net of trade discounts, rebates, sales tax, value added tax and excise duty.

- Export sales are recognised based on the date of bill of lading except, sales to Nepal which are recognised when the goods cross the Indian territory, which is when substantial risks and rewards of ownership passes to the customers.

- Revenue from services is recognised on rendering of services.

- Interest and other income are recognised on accrual basis.

- Income from export incentives such as premium on sale of import licences, duty drawback etc. are recognised on accrual basis to the extent the ultimate realisation is reasonably certain.

- Dividend income is recognised when right to receive dividend is established.

j) Accounting for taxes on income

- Provision for current tax is made, based on the tax payable under the Income Tax Act, 1961. Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT (calculated in accordance with provisions of Section 115JB of the Income tax Act, 1961) over normal income-tax is recognised as an asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period of ten succeeding assessment years.

- Deferred tax on timing differences between taxable income and accounting income is accounted for, using the tax rates and the tax laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets on unabsorbed tax losses and unabsorbed tax depreciation are recognised only when there is a virtual certainty of their realisation. Other deferred tax assets are recognised only when there is a reasonable certainty of their realisation.

k) Foreign Currency Transactions

- Initial recognition : - Transactions in foreign currencies are recognised at the prevailing exchange rates between the reporting currency and a foreign currency on the transaction dates.

- Conversion : -Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognised in the Statement of profit and loss. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

- Exchange differences:- The Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

- Realized gains and losses on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss.

- Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognised in the Statement of Profit and Loss.

- Forward exchange and other derivative contracts entered into to hedge foreign currency risk of an existing assets/ liabilities In case of forward contracts with underlying assets or liabilities, the difference between the forward rate and the exchange rate on the date of inception of a forward contract is recognised as income or expense and is amortised over the life of the contract.

- Exchange differences on such contracts are recognised in the Statement of Profit and Loss in the period in which the exchange rate changes.

- Any profit or loss arising on cancellation or renewal of forward exchange contracts are recognised as income or expense for the period.

- Forward contracts entered into by the company to cover its exposure against firm commitment are marked to market as at the year end. The resultant loss is recognized in the Statement of Profit and Loss and gain, if any is ignored.

- Premium or discount on foreign currency forward and option contracts are amortized and recognized in the statement of profit and loss over the period of contract.

l) Research and Development

Equipment purchased and cost of construction of assets used for research and development is capitalised when commissioned and included in the fixed assets. Revenue expenditure on research and development is charged in the period in which it is incurred.

m) Retirement Benefits

- Provident Fund:- Contribution towards provident fund is made to the regulatory authorities. Such benefits are classified as defined contribution schemes as the Company does not carry any further obligations, apart from the contribution made on a monthly basis.

- Superannuation Fund: - The Company has Defined Contribution plans for Superannuation Fund. Contributions payable to the Superannuation Fund maintained by LIC are charged to the Statement of Profit and Loss. The Company does not carry any further obligations, apart from the contribution made.

- Gratuity: - The Company provides for gratuity, a defined Benefit plans (the "Gratuity Plan") covering eligible employees in accordance with the payment of Gratuity Act, 1972. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the nature of employment. The Company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses / gains are recognized in the statement of Profit and Loss account in the year in which they arise. The Gratuity Fund is maintained with LIC which is recognized by the income tax authorities.

- Compensatory Absence:- The Company provides for the encashment/availment of leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/availment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation.

n) Borrowing Cost

Borrowing Costs attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the asset till the asset is ready for use. Interest on other borrowings is charged to Statement of Profit and Loss.

o) Leases

Lease arrangement where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rent under operating leases are recognised in the Statement of Profit and Loss as per terms of agreement.

Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.

p) Warranty Provision

The estimated liability for product warranties is recorded at the time of the sale of the products. The provision is based on management''s estimate of the future cost of corrective action on product failure considering the claims received in the past.

q) Provisions and Contingencies

Provisions are recognised when there is a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

r) Impairment

The carrying value of assets/cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life to their present value based on an appropriate discount factor.

s) Earnings per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company''s earnings per share is the net profit for the period after deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, sub-division of shares etc. that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

t) Cash and Cash Equivalents

In the Cash Flow Statement, cash and cash equivalents includes cash in hand, demand deposits with banks, other short- term highly liquid investments with original maturities of three months or less.


Mar 31, 2014

A) Basis of Accounting

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under section 133 of Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the companies operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - noncurrent classification of assets and liabilities.

b) Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amount of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) Tangible Assets

- Tangible Assets are stated at their original cost (net of CENVAT where applicable) including freight, duties,customs and other incidental expenses relating to acquisition and installation. Interest and other finance charges paid on loans for the acquisition of tangible qualifying assets are apportioned to the cost of fixed assets till they are ready for use.

- Expenditure incurred during the period of construction is carried as capital work-in-progress and on completion the costs are allocated to the respective fixed assets.

- Foreign exchange fluctuations on payment / restatement of long term liabilities related to fixed assets are charged to Statement of Profit and Loss.

- Assets held for sale or disposal are stated at the lower of their net book value and net realisable value.

d) Intangible Assets

Intangible assets comprising of computer software and technical know-how fee are initially measured at cost and amortised so as to reflect the pattern in which the asset''s economic benefits are consumed.

e) Depreciation / Amortization :

Depreciation on fixed assets, is charged on Straight Line Method (SLM) at rates specified in Schedule XIV to Companies Act, 1956 on a pro-rata basis except that:

- Assets costing less than Rs.5000/- are fully depreciated in the period of purchase ,

- Vehicles used by employees are depreciated over the period of 60 months considering this period as the useful life of vehicle for the Company.

- Computer hardware and software are being depreciated over a period of three years.

- Leasehold land is amortised over the lease period.

- Buildings on leasehold land are amortised over the lease period or useful life of the building whichever is shorter.

- Technical know-how fee is amortised over a period of 6 years or period of agreement, whichever is shorter.

- Tools and dies are depreciated over a period, upto eight years, determined based on technical evaluation.

f) Investments

Long term investments are stated at cost. Provision is made for any diminution other than temporary in the value of investments.

Current investments are stated at cost or fair value, whichever is lower.

g) Inventories

Inventories are stated at lower of cost or net realizable value. Cost of raw materials, stores and spares and packing materials are determined on weighted average basis. Cost of finished goods and work in progress comprises raw material, direct labour, other direct costs and related production overheads.

h) Government Grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, they are deducted from gross value of such assets.

Government grants of the nature of promoters'' contribution are credited to capital reserve and treated as a part of the shareholders'' funds.

i) Revenue Recognition

- Domestic sales are recognised at the point of dispatch/delivery of goods to the customers as per terms of contract, which is, when substantial risks and rewards of ownership passes to the customers, and are stated net of trade discounts, rebates, sales tax, value added tax and excise duty.

- Export sales are recognised based on the date of bill of lading except, sales to Nepal which are recognised when the goods cross the Indian territory, which is when substantial risks and rewards of ownership passes to the customers.

- Revenue from services is recognised on rendering of services.

- Interest and other income are recognised on accrual basis.

- Income from export incentives such as premium on sale of import licenses, duty drawback etc. are recognised on accrual basis to the extent the ultimate realisation is reasonably certain.

- Dividend income is recognised when right to receive dividend is established. j) Accounting for taxes on income

- Provision for current tax is made, based on the tax payable under the Income Tax Act, 1961. Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT (calculated in accordance with provisions of Section 115JB of the Income tax Act, 1961) over normal income-tax is recognised as an asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period of ten succeeding assessment years.

- Deferred tax on timing differences between taxable income and accounting income is accounted for, using the tax rates and the tax laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets on unabsorbed tax losses and unabsorbed tax depreciation are recognised only when there is a virtual certainty of their realisation. Other deferred tax assets are recognised only when there is a reasonable certainty of their realisation.

k) Foreign Currency Transactions

- Initial Recognition: - Transactions in foreign currencies are recognised at the prevailing exchange rates between the reporting currency and a foreign currency on the transaction dates.

- Conversion: -Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognised in the Statement of profit and loss. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non- monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

- Exchange differences:- The Company accounts for exchange differences arising on translation/ settlement of foreign currency monetary items as below:

- Realized gains and losses on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss.

- Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognised in the Statement of Profit and Loss.

- Forward exchange and other derivative contracts entered into to hedge foreign currency risk of an existing assets/liabilities

- In case of forward contracts with underlying assets or liabilities, the difference between the forward rate and the exchange rate on the date of inception of a forward contract is recognised as income or expense and is amortised over the life of the contract.

- Exchange differences on such contracts are recognised in the Statement of Profit and Loss in the period in which the exchange rate changes.

- Any profit or loss arising on cancellation or renewal of forward exchange contracts are recognised as income or expense for the period.

- Forward contracts entered into by the Company to cover its exposure against firm commitment are marked to market as at the year end. The resultant loss is recognized in the Statement of Profit and Loss and gain, if any is ignored.

I) Research and Development

Equipment purchased and cost of construction of assets used for research and development is capitalised when commissioned and included in the fixed assets. Revenue expenditure on research and development is charged in the period in which it is incurred.

m) Retirement Benefits

- Provident Fund:- Contribution towards provident fund is made to the regulatory authorities. Such benefits are classified as defined contribution schemes as the Company does not carry any further obligations, apart from the contribution made on a monthly basis.

- Superannuation Fund: - The Company has Defined Contribution plans for Superannuation Fund. Contributions payable to the Superannuation Fund maintained by LIC are charged to the Statement of Profit and Loss. The Company does not carry any further obligations, apart from the contribution made.

- Gratuity: - The Company provides for gratuity.a defined Benefit plans (the "Gratuity Plan") covering eligible employees in accordance with the payment of Gratuity Act, 1972. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the nature of employment. The Company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses/ gains are recognized in the statement of Profit and Loss account in the year in which they arise. The Gratuity Fund is maintained with LIC which is recognized by the income tax authorities.

- Compensatory Absence:- The Company provides for the encashment/availment of leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/availment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation.

n) Borrowing Cost

Borrowing Costs attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the asset till the asset is ready for use. Interest on other borrowings is charged to Statement of Profit and Loss.

o) Leases

Lease arrangement where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rent under operating leases are recognised in the Statement of Profitand Loss as per terms of agreement.

Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.

p) Warranty Provision

The estimated liability for product warranties is recorded at the time of the sale of the products. The provision is based on management''s estimate of the future cost of corrective action on product failure considering the claims received in the past.

q) Provisions and Contingencies

Provisions are recognised when there is a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

r) Impairment

The carrying value of assets/cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life to their present value based on an appropriate discount factor.

s) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company''s earnings per share is the net profit for the period after deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, sub-division of shares etc. that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

t) Cash and Cash Equivalents

In the Cash Flow Statement, cash and cash equivalents includes cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.


Mar 31, 2013

A) Basis of Accounting

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under section 211(3c) [Companies (Accounting Standard) Rules, 2006, as amended ] and other relevant provisions of Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the companies operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current - non current cycle of assets and liabilities.

b) Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amount of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statement are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) Tangible Assets

1) Tangible Assets are stated at their original cost (net of MODVAT where applicable) including freight, duties, customs and other incidental expenses relating to acquisition and installation. Interest and other finance charges paid on loans for the acquisition of tangible qualifying assets are apportioned to the cost of fixed assets till they are ready for use.

2) Expenditure incurred during the period of construction is carried as capital work-in-progress and on completion the costs are allocated to the respective fixed assets.

3) Foreign exchange fluctuation on payment / restatement of long term liabilities related to fixed assets are charged to Statement of Profit and Loss.

4) Assets held for sale or disposals are stated at the lower of their net book value and net realisable value.

d) Intangible Assets

Intangible assets comprising of computer software and technical know-how fee are initially measured at cost and amortised so as to reflect the pattern in which the asset''s economic benefits are consumed.

e) Depreciation / Amortization.

Depreciation on fixed assets, is charged on Straight Line Method (SLM) at rates specified in Schedule XIV to The Companies Act, 1956 on a pro-rata basis except that :

1. Assets costing less than Rs.5000/- are fully depreciated in the period of purchase

2. Vehicles used by employees are depreciated over the period of 60 months considering this period as the useful life of vehicle for the Company.

3. Computer hardware and software are being depreciated over a period of three years.

4. The leasehold land is amortised over the lease period.

5. Buildings on leasehold land are amortised over the lease period or useful life of the building whichever is shorter.

6. Technical know-how fee is amortised over a period of 6 years or period of agreement, whichever is shorter.

7. Tools and dies are depreciated over a period, upto eight years, determined based on technical evaluation.

f) Investments

Long term investments are stated at cost. Provision is made for any permanent diminution in the value of investments.

Current investments are stated at cost or fair value, whichever is lower.

g) Inventories

Inventories are stated at lower of cost or net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing them to their respective location and condition. Cost of raw materials, stores and spares and packing materials are determined on weighted average basis.

h) Capital Grants

Grants received from the Government are retained as Capital Reserve until the conditions stipulated in the respective schemes are complied with. However, the grants related to specific assets are deducted from the gross value of such assets.

i) Revenue Recongition

i) Domestic sales are recognised at the point of dispatch of goods to the customers, which is when substantial risks and rewards of ownership passed to the customers, and are stated net of trade discounts, rebates, sales tax, value added tax and excise duty.

ii) Export sales are recognised based on the date of bill of lading except, sales to Nepal which are recognised when the goods cross the Indian territory, which is when substantial risks and rewards of ownership is passed to the customers.

(iii) Revenue from services is recognised on rendering of services.

(iv) Interest and other income are recognised on accrual basis.

(v) Income from export incentives such as premium on sale of import licences, duty drawback etc. are recognised on accrual basis to the extent the ultimate realisation is reasonably certain.

(vi) Dividend income is recognised when right to receive dividend is established.

j) Accounting for taxes on income

(i) Provision for current tax is made, based on the tax payable under the Income Tax Act, 1961. Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT (calculated in accordance with provisions of Section 115JB of the Income tax Act, 1961) over normal income-tax is recognised as an asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period of ten succeeding assessment years.

(ii) Deferred tax on timing differences between taxable income and accounting income is accounted for, using the tax rates and the tax laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets on unabsorbed tax losses and unabsorbed tax depreciation are recognised only when there is a virtual certainty of their realisation. Other deferred tax assets are recognised only when there is a reasonable certainty of their realisation.

k) Foreign Currency Transactions

Foreign Currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Foreign currency monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing on the Balance Sheet date. Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of foreign currency monetary assets and liabilities are recognised in the Statement of profit and loss. Non-monetary foreign currency items are carried at cost.

The premium or discount arising at the inception of forward exchange contract to hedge an underlying asset or liability of the Company is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the Statement of profit and loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognised as income or expense during the year.

l) Research and Development

Equipment purchased for research and development is capitalised when commissioned and included in the fixed assets. Revenue expenditure on research and development is charged in the period in which it is incurred.

m) Retirement Benefits

Provident Fund: Contribution towards provident fund is made to the regulatory authorities. Such benefits are classified as defined contribution schemes as the company does not carry any further obligations, apart from the contribution made on a monthly basis.

Superannuation Fund: The Company has Defined Contribution plans for Superannuation Fund. Contributions payable to the Superannuation Fund maintained by the LIC are charged to the Statement of profit and loss.

Gratuity:

The Company provides for gratuity, a Defined Benefit plan (the "Gratuity Plan") covering eligible employees in accordance with the payment of Gratuity Act, 1972. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the nature of employment. The Company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses / gains are recognized in the Statement of profit and loss in the year in which they arise. The Gratuity Fund is maintained with LIC which is recognized by the income tax authorities.

Compensatory Absence:

Accumulated compensated absences which are expected to be availed or encashed within 12 months from the end of the year end are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

n) Borrowing Cost

Borrowing Costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the asset till the asset is ready for use. Interest on other borrowings is charged to Statement of profit and loss.

o) Leases

Lease arrangement where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rent under operating leases are recognised in the Statement of profit and loss on straight line basis.

Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.

p) Warranty Provision

The estimated liability for product warranties is recorded at the time of the sale of the products. The provision is based on management''s estimate of the future cost of corrective action on product failure established using historical information regarding frequency and average cost of servicing the warranty claims.

q) Provisions and Contingencies

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.

r) Impairment

The management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If an asset is impaired, the Company recognises an impairment loss as the excess of the carrying amount of the asset over the recoverable amount.

s) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company''s earnings per share is the net profit for the period after deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, sub-division of shares etc. that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

t) Segment Reporting

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Further intersegment revenue have been accounted for based on the transaction price agreed to between segments.

u) Cash and Cash Equivalents

In the Cash Flow statement cash and cash flow equivalents includes cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.


Mar 31, 2012

During the year ended 31st March, 2012, the revised schedule VI notified under the Companies Act, 1956 has become applicable to the company, for preparation and presentation of its financial statement. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statement. However it has significant impact on presentation and disclosures made in the financial statements. Assets and liabilities have been classified as current and non - current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI of the Companies Act, 1956. Based on the nature of activity carried out by the company and the period between the procurement of materials and realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current, non - current classification of assets & liabilities. The Company has also reclassified / regrouped the previous year figures in accordance with the requirements applicable in the current year.

a) Basis of Accounting

The Financial statements have been prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

b) Fixed Assets and Depreciation

a) Fixed Assets are stated at their original cost (net of MODVAT where applicable) including freight, duties, customs and other incidental expenses relating to acquisition and installation. Interest and other finance charges paid on loans for the acquisition of fixed assets are apportioned to the cost of fixed assets till they are ready for use.

b) Expenditure incurred during the period of construction is carried as capital work-in-progress and on completion the costs are allocated to the respective fixed assets.

c) Foreign exchange fluctuation on payment / restatement of long term liabilities related to fixed assets are charged to profit and loss Account.

d) Depreciation has been provided on straight-line method at the rates and in the manner specified under Schedule XIV of the Companies Act, 1956, except for the following:

i. Computer hardware and software are being depreciated over a period of three years.

ii. The leasehold land is amortised over the lease period.

iii. Buildings on leasehold land are amortised over the lease period or useful life of the building whichever is shorter.

iv. Technical know-how fee is amortised over a period of 6 years or period of agreement, whichever is shorter.

v. Tools and dies are depreciated over a period, upto eight years, determined based on technical evaluation.

vi. VSAT communication equipment is depreciated over a period of 5 years.

c) Investments

Long term investments are stated at cost. Provision is made for any permanent diminution in the value of investments.

Current investments are stated at cost or fair value, whichever is lower.

d) Inventories

Inventories are stated at lower of cost or net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing them to their respective location and condition. Cost of raw materials, stores and spares and packing materials are determined on weighted average basis.

e) Capital Grants

Grants received from the Government are retained as Capital Reserve until the conditions stipulated in the respective schemes are complied with. However, the grants related to specific assets are deducted from the gross value of such assets.

f) Revenue and Expense Recognition

Revenue from sale of goods is accounted for on dispatch of goods which represents transfer of significant risks and rewards to the customers. Sales are inclusive of excise duty and net of sales return and trade discounts.

Expenses are accounted for on an accrual basis.

g) Taxation

Tax expense (credit) is the aggregate of current tax and deferred tax.

a) Current Tax

Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year.

b) Deferred Tax

Deferred tax for timing differences between the book profits and tax profits is accounted for using the tax rates and laws that have been enacted or substantively enacted as of the Balance Sheet date.

Deferred tax assets for tax losses and unabsorbed depreciation are recognized to the extent that the realisation of the related tax benefit through the future taxable profits is virtually certain. Deferred tax assets arising from other timing differences are recognised to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

h) Foreign Currency Transactions

Foreign Currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Foreign currency monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing on the Balance Sheet date. Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of foreign currency monetary assets and liabilities are recognised in the Profit and Loss Account. Non-monetary foreign currency items are carried at cost.

The premium or discount arising at the inception of forward exchange contract to hedge an underlying asset or liability of the Company is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the Profit and Loss Account in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognised as income or expense during the year.

Pursuant to The Institute of Chartered Accountants of India's announcement 'Accounting for Derivatives', the Company marks-to-market all other derivative contracts (forward contracts in respect of firm commitments and highly probable forecast transactions, swaps and currency options) outstanding at the end of the year and the resultant mark-to-market losses, if any, are recognised in the Profit and Loss Account. Any profit or loss arising on settlement or cancellation of such derivative contracts is recognised as income or expense for the year.

i) Research and Development

Equipment purchased for research and development is capitalised when commissioned and included in the fixed assets. Revenue expenditure on research and development is charged in the period in which it is incurred.

j) Retirement Benefits

The Company has Defined Contribution plans for post employment benefits' namely Provident Fund and Superannuation Fund. Contributions payable to Provident Fund and the Superannuation Fund maintained by the LIC are charged to the Profit and Loss Account.

The Company has Defined Benefit plans, namely compensated absences and gratuity for employees, the liability for which is determined on the basis of actuarial valuation at the end of the year. The Gratuity Fund is recognised by the income tax authorities and is administered through trusts.

Gains and losses arising out of actuarial valuations are recognised immediately in the Profit and Loss Account. k) Borrowing Cost

Borrowing Costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the asset till the asset is ready for use. Interest on other borrowings is charged to Profit and Loss Account.

l) Leases

Lease arrangement where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rent under operating leases are recognised in the Profit and Loss Account on straight line basis.

Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.

m) Warranty Provision

The estimated liability for product warranties is recorded at the time of the sale of the products. The provision is based on management's estimate of the future cost of corrective action on product failure established using historical information regarding frequency and average cost of servicing the warranty claims.

n) Provisions and Contingencies

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.

o) Impairment

The management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If an asset is impaired, the company recognises an impairment loss as the excess of the carrying amount of the asset over the recoverable amount.


Mar 31, 2011

1. Basis of Accounting

The Financial statements have been prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

2. Fixed Assets and Depreciation

a) Fixed Assets are stated at their original cost (net of MODVAT where applicable) including freight, duties, customs and other incidental expenses relating to acquisition and installation. Interest and other finance charges paid on loans for the acquisition of fixed assets are apportioned to the cost of fixed assets till they are ready for use.

b) Expenditure incurred during the period of construction is carried as capital work-in-progress and on completion the costs are allocated to the respective fixed assets.

c) Foreign exchange fluctuation on payment / restatement of long term liabilities related to fixed assets are charged to profit and loss Account.

d) Depreciation has been provided on straight-line method at the rates and in the manner specified under Schedule XIV of the Companies Act, 1956, except for the following:

i. Computer hardware and software are being depreciated over a period of three years.

ii. The leasehold land is amortised over the lease period.

iii. Buildings on leasehold land are amortised over the lease period or useful life of the building whichever is shorter.

iv. Technical know-how fee is amortised over a period of 6 years or period of agreement, whichever is shorter.

v. Tools and dies are depreciated over a period, upto eight years, determined based on technical evaluation.

vi. VSAT communication equipment is depreciated over a period of 5 years.

3. Investments

Long term investments are stated at cost. Provision is made for any permanent diminution in the value of investments.

Current investments are stated at cost or fair value, whichever is lower.

4. Inventories

Inventories are stated at lower of cost or net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing them to their respective location and condition. Cost of raw materials, stores and spares and packing materials are determined on weighted average basis.

5. Capital Grants

Grants received from the Government are retained as Capital Reserve until the conditions stipulated in the respective schemes are complied with. However, the grants related to specific assets are deducted from the gross value of such assets.

6. Revenue and Expense Recognition

Revenue from sale of goods is accounted for on dispatch of goods which represents transfer of significant risks and rewards to the customers. Sales are inclusive of excise duty and net of sales return and trade discounts.

Expenses are accounted for on an accrual basis.

7. Taxation

a) Current Tax

Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year.

b) Deferred Tax

Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. The effect on deferred tax assets and liabilities of a change in the tax rates is recognised using the tax rates and tax laws enacted or substantially enacted at the balance sheet date. Where the Company has carried forward losses or unabsorbed depreciation deferred tax assets are not recognised unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

8. Foreign Currency Transactions

Foreign Currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Foreign currency monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing on the Balance Sheet date. Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of foreign currency monetary assets and liabilities are recognised in the Profit and Loss Account. Non-monetary foreign currency items are carried at cost.

The premium or discount arising at the inception of forward exchange contract to hedge an underlying asset or liability of the Company is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the Profit and Loss Account in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognised as income or expense during the year.

Pursuant to The Institute of Chartered Accountants of India's announcement 'Accounting for Derivatives', the Company marks-to-market all other derivative contracts (forward contracts in respect of firm commitments and highly probable forecast transactions, swaps and currency options) outstanding at the end of the year and the resultant mark-to-market losses, if any, are recognised in the Profit and Loss Account. Any profit or loss arising on settlement or cancellation of such derivative contracts is recognised as income or expense for the year.

9. Research and Development

Equipment purchased for research and development is capitalised when commissioned and included in the fixed assets. Revenue expenditure on research and development is charged in the period in which it is incurred.

10. Employee Benefits

(i) Post- Employment Benefits

a) Defined Contribution Plans

The Company has Defined Contribution Plans for post employment benefits in the form of Superannuation Fund which

is administered through trustees and Life Insurance Corporation of India and Provident Fund which is administered by Regional Provident Fund Commissioner.

The Company has no further obligation beyond making the contributions.

The Company's contributions are charged to the Profit and Loss Account as and when incurred.

b) Defined Benefit Plans

The Company has Defined Benefit Plan for post employment benefit in the form of Gratuity. Gratuity Fund is administered through trustees and Life Insurance Corporation of India. Liability for Defined Benefit Plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by independent actuary. The actuarial valuation method used by independent actuary for measuring the liability is the Projected Unit Credit method.

(ii) Other Long-term Employee Benefit

Provision for Compensated Absences is based on an actuarial valuation carried out at Balance Sheet date.

(iii) Termination benefits are recognised as an expense as and when incurred.

(iv) The Actuarial gains and losses arising during the year are recognized in the Profit and Loss Account.

11. Borrowing Cost

Borrowing Costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the asset till the asset is ready for use. Interest on other borrowings is charged to Profit and Loss Account.

12. Leases

Lease arrangement where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rent under operating leases are recognised in the Profit and Loss Account on straight line basis.

Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.

13. Warranty Provision

The estimated liability for product warranties is recorded at the time of the sale of the products. The provision is based on management's estimate of the future cost of corrective action on product failure established using historical information regarding frequency and average cost of servicing the warranty claims.

14. Provisions And Contingencies

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.

15. Impairment

The management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If an asset is impaired, the company recognises an impairment loss as the excess of the carrying amount of the asset over the recoverable amount.


Mar 31, 2010

1. Basis of Accounting

The Financial statements have been prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

2. Fixed Assets and Depreciation

a) Fixed Assets are stated at their original cost (net of MODVAT where applicable) including freight, duties, customs and other incidental expenses relating to acquisition and installation. Interest and other finance charges paid on loans for the acquisition of fixed assets are apportioned to the cost of fixed assets till they are ready for use.

b) Expenditure incurred during the period of construction is carried as capital work-in-progress and on completion the costs are allocated to the respective fixed assets.

c) Foreign exchange fluctuation on payment / restatement of long term liabilities related to fixed assets are charged to profit and loss Account.

d) Depreciation has been provided on straight-line method at the rates and in the manner specified under Schedule XIV of the Companies Act, 1956, except for the following:

i. Computer hardware and software are being depreciated over a period of three years.

ii. The leasehold land is amortised over the lease period.

iii. Buildings on leasehold land are amortised over the lease period or useful life of the building whichever is shorter.

iv. Technical know-how fee is amortised over a period of 6 years or period of agreement, whichever is shorter.

v. Tools and dies are depreciated over a period, upto eight years, determined based on technical evaluation.

vi. VSAT communication equipment is depreciated over a period of 5 years.

3. Investments

Long term investments are stated at cost. Provision, if any, is made for permanent diminution in the value of investments.

Current investments are stated at cost or fair value, whichever is lower.

4. Inventories

Inventories are stated at lower of cost or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing them to their respective location and condition. Cost of raw materials, stores and spares and packing materials are determined on weighted average basis.

5. Capital Grants

Grants received from the Government are retained as Capital Reserve until the conditions stipulated in the respective schemes are complied with. However, the grants related to specific assets are deducted from the gross value of such assets.

6. Revenue and Expense Recognition

Revenue from sale of goods is accounted for on dispatch of goods which represents transfer of significant risks and rewards to the customers. Sales are inclusive of excise duty and net of sales return and trade discounts.

Claims recoverable on account of insurance are accounted for as and when the amounts recoverable can be reasonably determined.

Expenses are accounted for on an accrual basis.

7. Taxation

Tax expense (credit) is the aggregate of current tax and deferred tax charged (credited) to the Profit and Loss Account for the year.

a) Current Tax

Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year.

b) Deferred Tax

Deferred tax for timing differences between the book profits and tax profits is accounted for using the tax rates and laws that have been enacted or substantively enacted as of the Balance Sheet date.

Deferred tax assets for tax losses and unabsorbed depreciation are recognized to the extent that the realisation of the related tax benefit through the future taxable profits is virtually certain. Deferred tax assets arising from other timing differences are recognised to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

8. Foreign Currency Transactions

Foreign Currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Foreign currency monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing on the Balance Sheet date. Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of foreign currency monetary assets and liabilities are recognised in the Profit and Loss Account. Non- monetary foreign currency items are carried at cost.

The premium or discount arising at the inception of forward exchange contract to hedge an underlying asset or liability of the Company is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the Profit and Loss Account in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognised as income or expense during the year.

Pursuant to The Institute of Chartered Accountants of Indias announcement Accounting for Derivatives, the Company marks-to-market all other derivative contracts (forward contracts in respect of firm commitments and highly probable forecast transactions, swaps and currency options) outstanding at the end of the year and the resultant mark-to-market losses, if any, are recognised in the Profit and Loss Account. Any profit or loss arising on settlement or cancellation of such derivative contracts is recognised as income or expense for the year.

9. Research and Development

Equipment purchased for research and development is capitalised when commissioned and included in the fixed assets. Revenue expenditure on research and development is charged in the period in which it is incurred.

10. Retirement Benefits

The Company has Defined Contribution plans for post employment benefits namely Provident Fund and Superannuation Fund. Regular contributions made to Provident Fund are charged to the Profit and Loss Account. Regular contributions to the superannuation fund maintained by the LIC are charged to the Profit and Loss Account.

The Company has Defined Benefit plans namely compensated absences and Gratuity for employees, the liability for which is determined on the basis of actuarial valuation at the end of the year. The Gratuity Fund is recognised by the income tax authorities and is administered through trusts.

Gains and losses arising out of actuarial valuations are recognised immediately in the Profit and Loss Account as income or expense.

11. Borrowing Cost

Borrowing Costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the asset till the asset is ready for use. Interest on other borrowings is charged to Profit and Loss Account.

12. Leases

Lease arrangement where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rent under operating leases are recognised in the Profit and Loss Account on straight line basis.

Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.

13. Warranty

The estimated liability for product warranties is recorded at the time of the sale of the products. The provision is based on managements estimate of the future cost of corrective action on product failure established using historical information regarding frequency and average cost of servicing the warranty claims.

14. Provisions And Contingencies

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.

15. Impairment

The management periodically assesses, using external and internal sources whether there is an indication that an asset may be impaired. If an asset is impaired, the company recognises an impairment loss as the excess of the carrying amount of the asset over the recoverable amount.

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